TEXAS IS A WHOLE WHEAT ECONOMY-NO TWINKIE ECONOMY HERE

by Randy Watson

TEXAS “WHOLE WHEAT” ECONOMY

RECON
November 18, 2011
Copyright 2011. All rights reserved.

Material herein is published according to the fair-use doctrine of U.S. copyright laws related to non-profit, educational institutions. Items attributed to sources other than the Real Estate Center at Texas A&M University should not be reprinted without permission of the original source.

HOUSTON (Real Estate Center) – Add “baked goods” to the list of colorful analogies used to compare Texas’ relatively strong economy to that of the United States. That’s what State Comptroller Susan Combs did at yesterday’s 2012 Forecast Conference in Houston.

“The U.S. has what has been referred to as a ‘Twinkie economy,’” she said. “There are no natural ingredients. [Texas is] whole wheat, if you want to take a look at us versus the U.S. economy.”

Combs was speaking to a crowd of more than 400 business leaders, developers and students at the half-day event, which was presented by Urban Land Institute Houston and the Real Estate Center.

“We are now, as an economy, more diverse than either of our neighbors Canada or Mexico,” Combs said. “Our GDP, per capita, since 2001, [has] been larger than the U.S. every single year.”

Texas has lost about 4 percent of its jobs since the beginning of the recession, less than the United States (6 percent). Of those jobs, Combs said Texas has replaced about 90 percent, while the U.S. has replaced 23 percent.

“What’s more interesting to me is oil and gas,” Combs said. “Oil and gas lost well over 20 percent. They lost over 47,000 jobs. They’ve now regained more than that — about 57,000.”

Those jobs come with high wages, which helps drive sales tax revenue.

“The average weekly wage in the Eagle Ford is $2,764, about $140,000 per year,\” Combs said. \”Texas’ average is $940. So sales tax is being driven largely by the oil and gas sector. And sales tax is about 64 or 66 percent of all tax revenue. So when you’ve got a very aggressive, positive cycle of activity in oil and gas, it helps a lot.”

Although Combs focused largely on the positive aspects of the state economy, she didn\’t shy away from the challenges facing an ever-growing, ever-changing Texas. One of the biggest is meeting the educational needs of the state as its demographic shifts to predominantly Hispanic, a group that historically has had a lower educational attainment than Anglos.

According to U.S. Census Bureau data, 43 percent of Hispanics in Texas did not have a high school diploma in 2009, compared with 8 percent of non-Hispanic whites. In addition, Combs said 50 percent of Anglos have college degrees.

The result is a disparity in how much each group earns: Hispanic households in Texas earn, on average, $29,000 per year. The average Anglo household brings home $47,000.

In short, Texas is juggling huge growth, shifting demographics and challenges in both public and higher education.

\”We have to manage all these in some better way than we are doing now,” Combs said.

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